Wells Fargo Refuses Wife's Demand To Liquidate Joint Account and Send Her 50% of Proceeds

As a marriage dissolves, the wife instructs Wells Fargo to liquidate the joint account and forward 50% of the proceeds to her. Seems fair, no? Pursuant to the divorce proceedings, however, there were court orders that prevented the wife from withdrawing funds from the joint account. Now what? Well, Wells Fargo opted to refuse to follow the wife's instructions. In response, she sued. 

Case in Point

In a FINRA Arbitration Statement of Claim filed in May 2022, public customer Claimant Massar appearing pro se asserted that:

[R]espondents failed to follow her instructions to liquidate and transfer 50% of the assets held in a joint investment account that she previously owned with her ex-husband into a newly established individual investment account in her name only.

In the Matter of the Arbitration Between Lisa B. Massar, Claimant, v. Wells Fargo Clearing Services, LLC, Lauren R. Matles, Ronald A. Sirt, and Johanna E. Laudicina, Respondents (FINRA Arbitration Award 22-01283)
https://www.finra.org/sites/default/files/aao_documents/22-01283.pdf

Claimant Massar sought $4,731,350.00 in compensatory damages and $4,731,350.00 in punitive damages

Respondents generally denied the allegations, asserted affirmative defenses, and sought the expungement of the matter from the Central Registration Depository record of an Respondents Matles, Sirt, and Laudicina.

Motion to Dismiss

After entertaining oral argument, the FINRA Arbitration Panel granted Respondents' Motion to Dismiss on the grounds that:

During her divorce proceedings, Claimant demanded that Respondents liquidate one-half of a joint account with her husband held by Wells Fargo which they denied because of numerous court orders prohibiting her from withdrawing funds from the account. Claimant sought judicial relief from these restrictions on her joint account but the Court denied her this requested relief. Also, Claimant signed a Marital Dissolution Agreement included in the divorce judgment which awarded exclusive ownership of the account to her ex-husband. Respondents’ Motion to Dismiss the complaint pursuant to FINRA Rule 12504(6)(A) because Claimant had “released the claims in dispute by a . . . written release” is therefore granted.

Expungements

Following the FINRA Arbitration Panel's dismissal of her claims, Claimant Massar participated in the follow-on expungement hearing but did not take a position on the requested relief. The FINRA Arbitration Panel made a FINRA Rule 2080 finding that Massar's claim, allegation, or information is false; and, accordingly, recommended the expungement of Massar's arbitration case from the Central Registration Depository records of Respondents' Matles, Sirt, and Laudicina. The Panel offered the following rationale:

Claimant filed a complaint against Matles, Sirt, and Laudicina alleging her ex-husband mismanaged their joint brokerage account and that Respondents failed to execute her request to liquidate the account and transfer 50% of the proceeds into to a solely owned account for her. However, because of numerous court orders prohibiting her from withdrawing funds from the account including judicial relief she sought from the restrictions, which were denied by the court, Respondents did not honor her request. Claimant also signed a Marital Dissolution Agreement wherein she relinquished all rights to the subject account. The Panel finds the Claimant’s allegations or information are false. Therefore, the motion for expungement of any and all CRD records is granted.

Bill Singer's Comment

See this recent blog in which we discussed another divorce scenario:

JP Morgan Caught In The Middle Of Dueling Address Changes In Customers' Divorce (BrokeAndBroker.com Blog / May 15, 2023)
https://www.brokeandbroker.com/7036/jpmorgan-divorce-arbitration/

As a marriage begins to collapse, the husband instructs JP Morgan to change the brokerage account's address of record. When the wife learns of the change, she instructs JP Morgan to reinstate the original address. What's the appropriate response for a brokerage firm caught in the middle of an unfolding divorce? Do you play a game of address ping-pong and go back and forth with address changes? Do you get to pick and choose which spouse's demands you will follow? In a recent FINRA Arbitration, we're asked to consider this very issue.

• Wells Fargo
• Divorce
• Joint Account
• Spouses
• Husband
• Wife
• Marital Dissolution Agreement
• Rule 12504
• BrokeAndBroker
• Bill Singer